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New bill to regulate e-hailing services – Can it be done?

The calls for stricter regulations for electronic ride-sharing came into the spotlight in 2015, when Cape Town Traffic Officials impounded over 200 Uber cars because the drivers did not have Metered-Taxi Permits, which is required for all Taxis in South Africa.

In the same year, Gauteng Metered-Taxi Drivers protested against Uber and cars belonging to Uber, claiming that this service has an unfair competitive advantage because of the lack of regulation.

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In July 2017, the Commission for Conciliation, Mediation and Arbitration ruled that, despite the independence implied in the term “drivers-partners,” Uber drivers are in fact Employees of the ride-hailing service. This was the first step in South Africa to regulate the e-hailing services as a whole.

On Wednesday, 25 April 2018, the National Assembly took this process further and passed the National Land Transport Amendment Bill (hereafter “the Bill”). The Bill will provide for and regulate e-hailing services to not only enable the Operators of these services to operate with an app, but further to empower the Minister of Transport to prescribe requirements, standards applicable and offences for the use of e-hailing technology-enabled applications.

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The new Bill

Like many other Countries abroad, where Uber services are used, South Africa had no regulations governing e-hailing services which included Uber, Zebra and Taxify.

The main entity that has been fighting the government publicly is Uber. Uber has in the past consistently argued it acts as a ride-sharing app that facilitates rides between Passengers and Drivers, and not as a Metered-Taxi Operator.

The problem remains that most Government regulations are outdated and aren’t agile enough to accommodate Uber and similar innovations.

It is quite clear that Uber does not fit into any of these categories and cannot be made to fit into any of the categories due to its specific way of dealing with Customers and offering the service.

Initially, at the start of this regulation process, the South African Cabinet rejected Uber’s request to include a transportation category named “transport network operator,” for Operators using technology to solicit Customers in the Bill. However, the Bill is progress in the right direction by bringing the South Africa transport trajectory in line with international best practices.

The Minister of Transport, Mr Nzimande, said in a statement: “The dispensation will ensure that we bring the much-needed stability between the metered taxi and the electronic hailing taxi industry, which was characterised by uncertainty, conflict and criminality.”

The way forward

The Bill will now provide for temporary licences to be obtained “over the counter” from an Official or a member of the Regulatory Entity delegated by that Entity and a shortened process on application to replace a vehicle specified in the operating licence.

It seems that Uber specifically is not at all troubled by the new regulations. In a statement, Uber Africa Spokeswoman, Samantha Allenberg, said, “Uber respects the key role the national government plays in ensuring that South Africans have access to safe, affordable and efficient transportation options and we welcome this positive outcome.”

Once the Act is amended, we might see the change happening quite rapidly as Uber (and similar services) will not risk being out of business based on a technicality, for too long.

However, the question remains whether government intervention in innovation increases risk. Should this be regulated and is Government’s need to force a square peg into a round hole in its legislation the real answer here?

Conclusion

Overall, it seems that the e-hailing services is welcoming the current further regulations. There are also talks as to how these services should be forced to become BBBEE complaint seeing the employment losses already suffered

E-hailing services are being clamped down on all over the world as legislations are changed to fit into the modern times. But is this enough and will this affect the required outcome?

These are questions that will only be answered with time, and a close eye should be kept on how the e-hailing services adapt to maintain their competitive and modern advantage